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December 7, 2018 www.intellinews.com I Page 4
A former Alfa executive told bne IntelliNews that Fridman and his partners were allowed to keep the $14bn proceeds of their sale of TNK-BP offshore. “Abramovich was allowed to keep his proceeds from the sale of SibAl and Sibneft, and Fridman/Alfa were allowed to too,” said the former Alfa executive. “This is probably driven by their personal relations with Putin.”
Those personal relations may have broken down irrevocably now that Fridman has put most of his eggs in a Mayfair basket.
LetterOne, his UK-based investment holding, has been busy ploughing the TNK-BP proceeds into overseas energy, telecom and technology assets like ride-sharing app Uber. The fund spent $1.6bn on E.ON’s oil and gas assets in the North Sea only after the UK government forced it to sell its North Sea fields in the country because of the risk of facing Russian sanctions.
On December 4, it was disclosed that Fridman's oil firm DEA, which is controlled by LetterOne, is to acquire Sierra Oil & Gas in Mexico for
a reputed $500mn.
Pamplona Capital, a UK private equity fund backed by Fridman, has also been snapping
up assets in Europe and the US. The Mayfair- based firm, which also has a New York office,
last year closed its fifth buyout fund at €3bn. Current investments from Pamplona’s fourth fund include a majority stake in Hungary-based pet food manufacturer Partner in Pet Food, which the firm bought from rival buyout shop Advent International for €315m in April 2015. It also tried to acquire Dr Martens, the boot maker once favoured by punks and skinheads.
Another reason for Fridman to dispose of his bank now could be the increasing spotlight
from the Mueller investigation into mysterious online communication between Alfa Bank's computer server and a domain tied to the Trump Organisation during the 2016 election.
Alfa's lawyers have strenously denied the lender had any connection to the Donald Trump's campaign but one senior insider confessed their servers may have been hijacked by a Russian rogue player without their permission.
At the recent Russia Calling forum in Moscow, Kostin noted that Alfa Bank is a kind of business card for private banking in Russia its culture is very different from the VTB business culture, so a potential consolidation of the two banks would be "very difficult."
Gazprombank, Russia's third-biggest lender, may ultimately be a better fit for Alfa and may have the war chest to pay for it.
The secretive bank, which is known to be staffed by many former FSB intelligence service operatives, is run by Andrey Akimov, a close
St Petersburg ally of Putin since the 1990s.
Akimov, who has never given an interview on the record, likes to drive a Tesla Model S sports car around Vienna, according to a Bloomberg News report.
Gazprombank, which started in 1990 as an institution focused on catering for Gazprom, has grown to serve more than 45,000 corporate clients. The bank does relatively little retail banking so bolting on Alfa’s huge retail portfolio will mean less overlap.
On December 4, the lender raised its 2018 profit forecast to RUB40-45bn from RUB30-35bn rubles. The bank still has the significant heft of Russia’s gas export monopoly behind it. From January to September 2018, Gazprom, which owns 46% of Gazprombank's ordinary shares, issued unlimited interest-free subordinated deposits to the bank for 15.5bn rubles.
An acquisition of Alfa by a state player could be the final nail in the coffin for independent banking in Russia and would be ruinous for consumers and small to medium-sized businesses